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On Wednesday, January 30th, Judge Joseph Goodwin of the Southern District of West Virginia, granted a request that 5% of settlements and judgments handled by this federal court could be used to compensate lawyers.
“However, based on the numerous factors discussed above and the awards given in similar MDLs, this court believes that the award given is conservative and serves to justly compensate common benefit counsel for their work without unnecessarily burdening the plaintiffs in this litigation,” Judge Goodwin wrote.
By comparison, he pointed to other courts where the fee exceeded 5%. In the Actos litigation the common benefit fee was 9.9% and in Vioxx litigation it was 6.5%.
Judges approved a common benefit fund in this type of mass tort to spread the cost of litigation among those who file in an MDL or multidistrict litigation. At one time, Judge Goodwin had more than 104,000 product liability cases filed against seven manufacturers.
The common benefit fee is supposed to cover all of the collective works done by law firms such as depositions and discovery, vetting experts, developing theories of liability and conducting bellwether trials so each firm does not have to reinvent the wheel.
Five percent currently represents $366 million that has been paid into the common benefit fund by defendants from settlements and jury verdicts. When all cases are settled the fees for lawyers could top $550 million.
The Common Benefit Fees and Cost Committee (FCC), made up of eight law firms, is headed by Henry Garrard of Blasingame, Burch Garrard & Ashley of Athens, Georgia, which seeks the largest amount of compensation, based on the greatest number of hours contributed to the discovery process.
Those eight have awarded themselves $249 million of or two-thirds of the $374 to be distributed. This averages nearly $29 million per FCC firm, or $739 an hour.
With an average court settlement of about $40,000, lawyers for Kline Specter, a Philadelphia law firm that's tried a number of high profile mesh cases, objected to the “excessive and unreasonable” fee and instead encouraged that half be returned to the injured women.
The 5% common benefit fee is too high, Kline Specter’s Lee Balefsky and some firms are being “significantly overcompensated.”
He points out that “a few firms are seeking to grab two-thirds of the fund. Instead they should remit their proportionate share of these saved funds to the injured women. Thus, the proposed allocation is directly relevant to the proposed assessment – and both are wrong.”
Meanwhile Kline & Specter falls at the other end of the range and is scheduled to collect at an hourly rate of $116, says the motion. The Philadelphia-based law firm has submitted thousands of hours of work done for state litigation in Pennsylvania, which it says are not being considered.
In a response filed December 3, Garrard claimed Kline Specter’s letter was “self-serving and unfounded” and that the Philadelphia firm benefited from research put into the MDL.
Of the seven pelvic mesh product liability trials so far in the Philadelphia Court of Common Pleas, clients of Kline Specter have been awarded compensation in five of the seven trials totaling $105.16 million.
Since the MDL formed in 2012, tens of thousands of transvaginal mesh cases have been resolved in this court through either trial or settlement for a total sum of $7.25 billion.
There are thousands of cases still on the docket waiting to be settled or remanded back to state court for trial.
It’s estimated that settlements could reach upward of $11 billion once all of the cases make their way through the system.
Judge Goodwin agreed that every plaintiff benefited from consolidating cases and allowing each firm to take advantage or the millions of defendant-produced documents, hundreds of motions and legal theories and experts that led to bellwether trials that eventually led to plaintiff settlements.
“The fruits of this efficient process were made available to every plaintiff and their counsel. The court finds that every plaintiff benefited greatly from these efforts.”
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January 30, 2019, Pretrial Order #327 on Fees
MND, Philadelphia Firm Asks Judge Goodwin to Denying Paying MDL Lawyers Millions in Fees and Expenses, December 3, 2018
UC Hastings College of the Law on Contingency Fee Caps
MND, Mesh Litigation MDL- What Are the Benefits?
